Manufacturing Site Repurposing Options What does the future hold in store… & What is the Value...

Manufacturing Site Repurposing Options

What does the future hold in store… & What is the Value Proposition?

BUSINESS RESEARCHRepurposing of Manufacturing Site

Current Manufacturing Site Strategies • Company X

– Launches website xxxcoating.com– Picks up film production from OM Companies– Aggressively going after other film products– Recently installed a number of capital upgrades & attending

conferences/new website– Sees growth out into the future past conventional films and planning

for it…

• Company Y– Aggressively competes and wins graphics products– Redesigns some current film offerings to compete in the future –

aggressively competes in Indian film market

Current Manufacturing Site Strategies • Conferences/Coating Machine Manufacturing

– AIMCAL /CEMA conferences held on a yearly basis held both in Europe and US (well over 100 exhibitors & many seminars)

– A number of companies still exist for making coating machines including bead and curtain coaters

• Our Company– Have some small contracts with outside companies for pilot services– Have a history of outside companies contacting us for services– Has very limited web presence and mainly for pilot capabilities– Have done prior repurposing studies and found some outside business

opportunities

Marketplace Data around Coating• Coating Market Research Reports:

– Global Market for Thin Film Materials to Reach $14.9 Billion in 2016 (Electronics.ca Research Network):

– Global Markets, Technologies and Materials for Thin and Ultrathin Films -- Focus on Electronics (Reportlinker.com ):

“The global market for thin film technologies (including equipment, materials and services) is currently valued at more than $50 billion and continues to grow.”

Manufacturing CapabilitiesManufacturing capability – wider than we think:• The current manufacturing structure has been driven by the requirement

of extremely uniform and robust photographic films:• The current manufacturing site can coat a much wider array of products

than just conventional AgX films– At lower flows; moderate speeds – can coat close to water viscosity– At moderate flows/speeds coating is capable for a wide array of viscosities– Could use a wide array of various polymers and solvents– Can use to coat a variety of surfaces (coat smooth and rough substrates) and can use

multiple slot dye configurations– Much of the research looking at manufacturing site capabilities was done in the 80’s

through 90’s– Pilot capability to demonstrate still exists to assess these alternate systems

Manufacturing CapabilitiesComparing different coating systems – thickness operating range:

Many coating technologies overlap each other in terms of capabilities

Patent/Development Activity in Manufacturing Field (since 2000)

• There have been over 50 patents issued around coating in the last 10 years:

• Much technical activity in the area, coating typeis a “buzz” word at coating conferences…

VALUE PROPOSITION OPTIONSRepurposing of Manufacturing Site

Value Proposition OptionsFilm Flow Options

Entire Film Flow Options

Manage to Film Decline

Film & Tollcoating Transition to Functional

Aqueous ML Coater

Staging for Future Sale

Degree of Difficulty /Resources

2014 - 2015 2015 - 2017 2015 + 2015 +

Current Approach – Manage to Volume Decline

• PROS:– Minimum cost

• CONS:– Film manufacturing discontinuance…– Lose uniform aqueous multilayer coating

capability forever

Manage to Film Decline

First Strategy – Film & Toll Manufacturing

• PROS:– Extends the life of film– Keep cash flow positive for a longer period of

time– Maintains manufacturing capability of functional

materials

• CONS:– Little tollcoating opportunities that make

significant money– Manufacturing optimized for film – need to

update facility & maintain resources

Extend Life of Film

Film & Tollcoating

Tollcoating OM Materials

Tollcoating Functional Materals

Second Strategy – Aqueous Functional Printing Manufacturing

• PROS:– Extends the life of manufacturing site– Could provide a method for both commercialization

and manufacturing of future products– Could provide a multitude of coating options if capital

is available

• CONS:– Not part of current vision– No active esearch on uniform aqueous materials– Significant effort to get to a low variable cost, flexible

manufacturing facility

Film & Some Tollcoating Operations

Transition to Functional

Aqueous ML Coater

Aid in Commercialization Path for Functional Printing Products

Functional Printing Manufacturing

Capital Upgrades

Uniform & Additive Functional Printing

Manufacturing

Company Future Vision

• To be a provider of higher margin specialized materials that have the following characteristics:– High resolution– Range of patterns– Utilize material property/formulation expertise

Last Strategy – Manufacturing Site-> Sale to Outside Investor

• PROS:– Generates cash for Company– Removes assets from company that are not part of the

future vision– Keeps jobs and tenants at site

• CONS:– Would require significant resources & budget for

establishing a potential future product portfolio & improving site for future sale

– High risk but high payback– May already be too late to explore & execute

Continue Film Operations &

Initiate Tollcoating

Staging for Future

Sale

Establish partnerships

Establish portfolio of future products

or revenue

Streamline & Increase Flexibility of site

WHAT DOES THE CURRENT MANUFACTURING INFRASTRUCTURE BRING TO THE TABLE?

Repurposing of Manufacturing Site

Sustain and Grow Approach –Lean Development Approach

• New Products - Time to market, cost and quality – key factors

• Control of the development chain critical to success of new products

• Toyota, Microsoft, Harley Davidson and Kodak film – key examples

• Separates start-ups from true successful businesses

Sustain & Grow – Value Proposition

• Pilot and manufacturing value proposition:

Path to commercialization and manufacturing(i.e. Product Development flow)

Current Film Development Flow

Bench Scale evaluations &

DesignSmall Scale PilotInitial Design Optimization Larger Scale PilotIntegration

Full Scale Manufacturing

Verification

HOW DOES MANUFACTURING SITE FIT INTO POTENTIAL FUTURE PRODUCTS?

Repurposing of Manufacturing Site

Functional Printing Market/Applications

From: http://www.marketsandmarkets.com/AnalystBriefing/functional-printing-market.asp

Aqueous Coating Applications in Functional Printing

• Coatings – protective coatings such a polymeric resins, overcoats to adjust gloss, lubrication (release agents) etc

• Conductive materials

Aqueous Coating Applications in Functional Printing

• Display – holographic films, 3D imaging

• EMI – technology to reduce electromagnetic interference

• Transistors – technology for circuit board backplanes – coupled with organic transistors

Aqueous Coating Applications in Functional Printing

• Fruit & vegetable containers with antimicrobial and slip coatings

• Smart walls, High Tech Building Materials (aircraft, space, military)

Aqueous Coating Applications in Functional Printing

• Fabrics and wall related materials• Coatings with medications and

regen film• Coatings coupled with sensors

EFFECTIVE USE OF CURRENT MANUFACTURING FLOW

Repurposing of Manufacturing Site

EFFECTIVE USE OF CURRENT MANUFACTURING FLOWCurrent Film Development &

Manufacturing Flow

Research & Development

Integration & Pilot Development

Full Scale Coating

Raw Materials & Roll Coating

Finishing & Packaging

Distribution & Market Channels

Marketing, Sales & Customer Support

Value Proposition -> Staging of Manufacturing Flow

• Photographic film = first functional printing product!• Functional printing materials could use the same

product flow….• Why not repurpose flow into consumable material

flow (usable for film or functional printing materials)?

• Use existing development, manufacturing, supply chain and market channels to move into functional printing arena without reinventing the wheel

• Partnership with other companies, universities etc to gain access to technology and new products

CONCLUSIONS & RECOMMENDATIONS

Repurposing of Manufacturing Site

Conclusions1. Current path will lead to discontinuance usage of the

existing photographic film manufacturing site and infrastructure

2. Outlined a number of options to extend the life of the facility and reuse the existing infrastructure

3. A moderate market exists for toll manufacturing and maintaining current photographic film products

4. Largest opportunity but highest risk would be to pursue future products while using existing products & toll manufacturing to cover costs – this would also require capital expenditures

5. Last option would be to marginally improvefacility and attempt to sell to perspectivebuyer.

Recommendations1. Present and discuss options and research with senior

management2. Attain management support to do further studies looking at

the business and technology potentials of the various options

3. Work with marketing and sales to identify potential toll manufacturing opportunities

4. Assess future staffing reduction impacts on potential strategies

5. Outline plan for path forward